(a) What is float? Explain briefly the difference between any two types of floats
that you know. How could you calculate each of them? [5]

(b) Competition is very great in the personal computer market. The Green
Company is considering whether or not to conduct a market survey to analyze
the potential sales of their new design, PX-20. This would cost $0.25 million.
The outcome of the survey would either be favorable or unfavorable. Based on
past experience, the probability of favorable outcome is 0.61.
If they decide not to enter the market, they can sell their patents for the product
for $1 million; if they decide to enter the market, they will go into large-scale
production of the PX-20. They have also developed the probabilities and the
expected profit figures under different conditions:

Develop the decision tree and determine whether or not the survey should be
taken. Recommend a course of action based on the EMV criterion. Comment
on one limitation of this method of analysis. [10]